U.S. Organic Sales Jump to $2.8 Billion
Sales of U.S. organic products in 1995 increased 22% over 1994 figures, according to a recent survey conducted by Natural Foods Merchandiser (NFM), a natural products industry journal. Organic sales increased from US$2.31 billion in 1994 to US$2.8 billion in 1995. This is the sixth year that the market for organic products has experienced greater than 20% growth.
NFM stated that several factors contributed to the continuing growth, including a widening consumer base, expansion by natural products retailers, greater mainstream acceptance and increasing organic acreage. In addition, natural food industry members state that regional and national promotional campaigns, such as the Organic Trade Association's Organic Harvest Month promotions, have helped bring in new customers. Positive coverage by national magazines may have also contributed to the growth. NFM pointed out that U.S. News and World Report, National Geographic and Food and Wine all ran supportive articles on organics in 1995.
Natural product stores led the U.S. organic market with $1.87 billion in sales, followed by direct farm and export sales ($714.8 million combined) and mass-market outlets ($210 million). "Natural product stores" refers to retailers specializing in natural, organic and health food items. Organics accounted for 31% of retail sales in these stores in 1995. Fresh organic produce represented approximately 25% of organic sales in natural product retailers, bringing in $402 million in sales, up 21% from 1994. Other important organic products included bulk foods, frozen foods, drinks and dairy products. According to NFM, short supplies of organic milk in 1994 led to greater production last year, and dairy sales climbed to $30 million. Organic clothing accounted for $2.5 million in sales from these stores. Organic herbs, vitamins and supplements led the organic market in terms of growth rate with a 33% increase in sales.
Mainstream supermarkets have also become significant purveyors of organic products. According to the survey, mass-market organic sales reached $210 million in 1995. NFM pointed out that a 1995 survey by The Packer, a mainstream produce trade journal, found that 54% of respondents said their supermarkets sell organic produce, and that some retailers estimate supermarkets can earn 10-15% more by selling organics.
Statistics for direct farm and export sales ($714.8 million combined) are based on conservative estimates, rather than hard data, partly because the U.S. Department of Agriculture (USDA) does not track direct farm-to-consumer or export sales of organic products. According to Bob Scowcroft of the Organic Farming Research Foundation, "USDA has not gained a firm grasp on organic exports, even though they track exports for every other commodity. Their commitment to do this is past due." Industry experts report that organic sales to Pacific Rim countries, Japan in particular, have boomed in recent years.
USDA does provide estimates of organic farm acreage in the U.S., placing total organic cropland at approximately 1,127,000 acres in 1996, up from an estimated 550,267 acres in 1991. The number of organic farmers almost doubled between 1991 and 1994, increasing from 2,841 to 4,060.
Source: "Widening Market Carries Organic Sales to $2.8 Billion in 1995," Natural Foods Merchandiser, June 1996.
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